Stabroek Block, Santos Basin set to add over 2.5 million b/d production by 2025 – WoodMac

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The prolific Stabroek Block offshore Guyana and neighbouring Brazil’s Santos Basin will add millions of barrels of oil to global production by 2025, industry analyst Wood Mackenzie said in a recent report.

The consultancy group said a challenging few years during the downturn forced deepwater to reinvent itself by cutting costs, cycle times and breakevens. It has emerged much stronger and is ready for the next phase of investment – much of which will be in deeper waters and in new plays and new countries.

“Brazil will continue to lead on investment and production in its prolific Santos Basin, but major discoveries over the past decade have been transformational for Mozambique, Israel, Egypt and Guyana. And while the type and quality of projects have changed, deepwater is here to stay,” WoodMac said.

A typical deepwater project in 2000 would have been in the 600 to 800-metre depth range. Now, growth from ultra-deepwater projects – those at water depths of more than 1,500 metres – is outpacing shelf projects.

WoodMac said by 2023, ultra-deepwater should account for more than half of overall deepwater production – with much of this growth coming from quality oil assets in Brazil, Guyana and the US.

Deep pockets required

As fields get deeper and increasingly technically challenging, deepwater will remain an industry for those with deep pockets. Companies in this space need the scale and capability to take on huge projects, matched by an appetite for the necessary risk. More than three-quarters of deepwater production is operated by eight companies: the Majors and Petrobras. Collectively, they operate 23 of the top 25 deepwater assets, WoodMac pointed out.

Where are the deepwater hotspots?

The analyst said Brazil and the US dominate; Nigeria, Angola and Australia also feature. Cumulatively, Guyana, Mozambique and Brazil will add 3.7 million boe/d of growth between 2018 and 2025.

“Brazil and Guyana stand out, with huge ongoing investment in oil developments. The Santos basin in Brazil and the Stabroek block in Guyana will add over 2.5 million b/d of oil production by 2025,” Luiz Hayum, WoodMac’s upstream analyst for Latin America said.